The CIO’s next big challenge: Going from alignment to a unified Technology Business

The relationship between IT and the rest of business has changed irrevocably during the past 18 months. When the coronavirus pandemic presented the business with its biggest possible challenges, IT stepped up to the plate and helped organizations overcome these hurdles.

CIOs used a combination of cloud platforms and collaborative technologies to establish remote-working strategies that kept businesses operating and workers productive. What might once have taken months or even years of planning was achieved in days or even hours.?

While COVID-19 has been the main driver for the change in relationship between IT and the rest of business, it has not been the only catalyst. Another crucial factor has been the strategic push for increased agility during the past two years. When customers couldn’t be served face-to-face due to lockdown measures, organizations recognized that they’d need new ways to serve their clients – and quickly.

CIOs used digital systems and services to twist their company’s business models in fresh and unexpected ways. From fast-food retailers establishing curbside pick-up points to sports events creating data-led virtual versions of major tournaments, one theme was constant: when businesses kept going during the pandemic, it was due to technology.

That success has prompted a big shift in perception. Before coronavirus, the common view of IT across the rest of the business was as a back-office function that dealt with printing, connectivity and file storage. Now as we move into the post-COVID age, all kinds of industry experts recognize that the business has a new appreciation for the role of technology. So what does this realization mean for the long-term relationship between business and IT?

The past two years should have helped organizations to recognize the dangers of a functional split between IT and the rest of the business. If every business is now a technology business, you can’t afford to bring technology into business conversations once key decisions have already been made. Technology must be engaged from the very beginning.?

This realization is a break from established ways of thinking. While executives have spent many years talking about the need to make technology implementation decisions quicker, much of this conversation has been focused on agility and quality rather than establishing stronger connections between technology and the rest of the business.

Much of this chatter was inspired by the success of fast-rising digital businesses. Take Amazon, for example. Back in the early days of the company, Jeff Bezos instituted a rule: every cross-business internal?team should be small enough that it could be fed with?two pizzas.

Agility became the de facto way of working for digital businesses, such as Amazon, Spotify and Facebook. Blue-chip companies saw the potential benefits that agility could bring and the way it helped deliver great results. They decided they needed closer alignment between business and IT, too.

However, in many cases, this attention was often lip service. Many of these organizations simply forgot that they relied on legacy IT systems. This reliance on older technology meant they couldn’t lift and shift their systems and processes as quickly as a two-pizza team. Even if they’d wanted or needed to change direction as quickly as Amazon or Netflix, their legacy systems and ways of working would have prevented it.

I remember working with a blue-chip business a couple of years ago that was undergoing a major agile transformation program to turn separate business and IT operations into a single business IT organization. As part of that process, I went and spoke with database administrators (DBAs) and system engineers, and asked them what was running on their servers: “Oracle, Microsoft SQL Server or MySQL” came their replies.

However, when I asked what business function was using the application or database, they didn't know – they had no real understanding of the business value of their products and services. And that’s a massive and, unfortunately, very common problem. How can IT workers make suggestions for innovation-led improvements if they don't understand the business challenges they’re trying to solve?

I believe it’s time to deal with that disconnect. IT has helped the business solve its challenges during the past two years, and now we need to build on this partnership. If you give IT professionals a greater appreciation of the business, it makes it much easier to create a tighter integration between technology and other functions.

When business and IT work as one, you're much more likely to find new ways of working, identify efficiency gains and develop potential answers to business challenges faster. The benefit of making IT part of the business moving forward comes down to three things: speed, quality, and value.

I think a strong analogy here is the modern Formula 1 racing team. To get an F1 car to the starting grid, designers, mechanics and racers all have to do specialist jobs independently. But to win races, you must have an integrated team – and technology and data play a crucial role in the modern business of racing, helping everyone to understand how minor modifications on one part of the car lead to major implications on the track.

What’s more, the high level of integration that’s crucial for success in F1 is increasingly critical in all businesses. If you see IT and data as an integral part of your business, you’ll make much better decisions because you'll be much better informed. You’ll have the knowledge to make data-led choices that will make a positive impact on society and that will help your business grow in a sustainable manner.

But getting to the point where IT is truly part of the business is not necessarily straightforward. It’s lovely to speak about the land of milk and honey, but reaching it is something else entirely. Companies talk about “being like Spotify”, but you should instead focus on creating a unified approach to technology and business. Effective change involves a focus on your legacy systems and corporate culture.

Companies often struggle with a huge amount of legacy IT. They still have many non-cloud-native applications that are difficult to manage, change and operate. Maintaining those legacy systems will mean CIOs need to run specific teams dedicated to older technology, and that’s before you even start thinking about re-platforming to something more modern.

But perhaps the biggest barrier to change is culture. Changing the mindset of a DBA who's worked in the same way for 20 years is very difficult. Someone who mainly looks after service level agreements and key performance indicators will require significant retraining to start learning about and understanding the business’ priorities.

CIOs must meet this challenge head-on. To create a truly agile technology organization, IT must be part of the business. They must invest in modern technology to help remove their reliance on legacy systems. They should also deal with cultural change concerns. Having the right mix of people – who believe the glass is always half-full, who want to innovate, and who want to take proactive responsibility for fixing issues or problems – is a critical issue for CIOs.

For many organizations, overcoming these challenges successfully in order to create an integrated approach to technology and business is not just a nice-to-have but a question of survival. If you don’t transform your legacy systems and develop a new cultural mindset, you won’t be able to respond to your clients’ requirements quickly – and they might go elsewhere, never to return.

If you want to continue to stay competitive and win the race for customers in the post-COVID age, then you must bring IT and the rest of the business even closer together – we call this shifting from alignment to unity.

Thanks for Reading

Gunnar Menzel, Chief Technology & Innovation Officer North & Central Europe at Capgemini